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desired goal.
Types of Decisions
1. Programmed and Non-programmed Decisions
2. Organizational and Personal Decision
Characteristics
1. Type of problem
2. Goals
3. Information
4. Frequency
5. Level of management
6. Time frame for solution
7. Basis of solution
Programmed Decisions
Structured
Clear and Specific
Unambiguous or complete
Routine and repetitive
Lower Levels
Short term
Policies, procedures and
rules
Non-Programmed Decisions
Unstructured
Vague
Ambiguous or incomplete
New and unusual
Upper Levels
Long term
Judgement and creativity
Routine Decisions
Repetitive nature
Short term
Minor impact
Routine and repetitive
Lower Levels
Standard procedures and
rules
Overtime payment or not
Strategic Decisions
Non repetitive nature
Long term
Permanent
New and unusual
Upper Levels
Judgement and creativity
Launching a new product..
Organisatonal and personal decisions: organizational decisions are made in the interest of the organisaton.
They are made by managers in their official capacity as allocators of resources. These decisions are based
on rationality, judgement and experience. Such decisions can be delegated to lower levels. These
decisions affect the functioning of the organisation.
Personal decisions are made by managers as individuals and on their own behalf. Such decisions can not
be delegated. Decisions to marry, to buy a house.affect the personal life of the manager but may affect
the organisation indirectly or directly.
Individual and group decision: individual decisions are taken by a single individual. They are concerned
mainly with routine problems for which broad policies are available. In such decisions, analysis of various
variables is relatively simple. Decisions taken by the Board of Directors or a committee are examples of
group decisions. These decisions are generally important for the organisation.
Disadvantages
1. Waste of time due to delay in decisions
2. Groups create pressures on members to
conformity and to compromise on the least
common alternative.
3. Domination of the group by one or two
powerful and influential members
4. May be costlier than individual decisions
5. tendency to pass the buck or avoid
responsibility
6. Disagreement among group members may
lead to conflict and ill feelings between them.
A)
Indentify the
Problem
Diagnose the
Problem
Discover
Alternatives
Evaluate
Alterantives
1.
2.
3.
4.
E) Select the Best Alternative: After evaluation, the optimum alternative is selected.
Optimum alternative is the alternative that will maximize the results under given
conditions. Past experience, experimentation, research and analysis are useful in
selecting the best alternative.
The decision maker has a clear and well defined goal that he is trying to maximize
He is fully objective and rational, uninfluenced by emotions
The decision maker can identify the problems clearly and precisely
He knows all the alternatives available to him as well as the consequences of each alternative.
The decision maker can rank all consequences according to preferences and knows which
consequence is the best.
6. He has the full freedom to choose the alternative that best optimizes the decision.
Rational Economic Model
1. Perfect rationality
2. Normative (Setting Standards)
3. Exhaustive search for all possible
alternatives
4. optimal decision
Administrative Model
1. bounded rationality
2. Descriptive (Not Logical)
3. Limited search for a few feasible
alternatives
4. satisfying or good enough decision
3.
4.
5.
6.
7.
Queuing theory
Replacement theory
Liner Programme(LP)
Decision Tree